Indian market ended in green on the back of buying support from realty, banking, metal, technology and oil & gas stocks. The domestic market opened with positive note and was trading firm on the back of strong global cues and slide in crude oil prices. Further it continued to trade in positive territory with gaining investors’ confidence and ended on a upbeat note. The BSE Sensex was trading above 15300 mark and the NSE Nifty 4500 mark. Oil crude futures fell on Monday and stood marginally above $134 a barrel after the UN chief informed that the top OPEC crude producer Saudi Arabia had agreed to increase its output by the next month by about a half million barrels a day to help record high prices. From the sectoral front, realty, banking, metal, technology and oil & gas stocks held gains of market while consumer durables and auto stocks were out of favor during final trading hours. Due to increase in excise duty by Union government on large cars, multi-utility vehicles and sports utility vehicles with an engine cubic capacity exceeding 1500, auto stocks dropped. The market breadth was positive as 1,776 stocks closed in green while 872 stocks closed in red.

The BSE Sensex closed higher by 206.20 points at 15,395.82 and NSE Nifty ended up by 55.40 points at 4,572.50. The BSE Mid Caps and Small Cap closed positive with increase of 71.55 points and 87.39 points at 6,299.72 and 7,669.11 respectively. The BSE Sensex touched intraday high 15,553.37 and intraday low of 15,333.07.

The market was back on track after slipping on Friday. Though it came off its highs, but still ended firm above the 15,350 mark. The bounce from the recent sell-off was in line with the recovery witnessed in the major Asian indices, which were up around 1% each. The Sensex resumed 143 points higher at 15,333 and advanced further on substantial buying support. Buying in realty and banking stocks propelled the index to an intra-day high of 15,553 in afternoon trades. After an initial upmove, the Sensex witnessed profit taking in the second half of the session and erased most of its gains to touch an intra-day low of 15,333. The index finally wrapped up the session with gains of 206 points at 15,396, while the Nifty closed with gains of 55 points at 4,573.

Of the 2,724 stocks traded on the BSE 1,770 stocks advanced, 878 stocks declined and 76 stocks ended unchanged. Among the sectoral indices, the BSE Realty index was the major gainer and was up 3.54% at 5,870.87 followed by the BSE Bankex index that was up 2.83% at 7,255.63. The BSE IT index, the BSE Power index, the BSE Teck index, the BSE FMCG index, the BSE Metal index and the BSE PSU index ended the day in positive territory. On the other hand, the BSE CD index and the BSE Auto index ended the day in red.

The market ended on a firm note on the back of firm global markets. However, a rebound in global crude oil prices pared strong intra-day gains on the domestic bourses. Banking and information technology stocks rallied. However, automobile stocks declined after the Union government raised excise duty on large cars, multi-utility vehicles and sports utility vehicles with an engine cubic capacity exceeding 1500.

Crude rebounded to $134.90 a barrel after falling in response to plans by Saudi Arabia to push output to its highest rate in decade. A solid surge in global crude oil prices has hit equities across the globe in the past few days as it has raised fears of global inflation.

Asian stocks, which opened before Indian market, rallied on Monday, 16 June 2008, as the US dollar rebounded and oil fell below $134 a barrel, boosting confidence in the region's exporters. Key indices in Japan, China, South Korea, Singapore, Taiwan, and Hong Kong were up by 0.18% to 2.72%. Oil later rebouded from lower level.

The 30-share BSE Sensex rose 206.20 points or 1.36% at 15,395.82. At the day’s high of 15,553.37, Sensex gained 363.75 points in early trade. Sensex gained 143.45 points at day's low of 15,333.07, hit in late trade.

The broader based S&P CNX Nifty gained 55.4 points or 1.23% at 4572.50. Nifty June 2008 futures were at 4570, at a discount of 2.5 points as compared to spot closing.

The BSE clocked a turnover of Rs 4512 crore as compared to Rs 5847.40 crore on Friday 13 June 2008. NSE's futures & options (F&O) segment turnover was Rs 40166.83 crore, which was lower than Rs 41003.4 crore on Friday, 13 June 2008.

The market breadth was strong on BSE with 1776 shares advancing as compared to 872 that declined. 76 remained unchanged.

The BSE Mid-Cap index rose 1.15% to 6,299.72 and BSE Small-Cap index up 1.15% to 7,669.11. Both these indices underperformed the Sensex.

State Bank of India fell 0.61% to Rs 1326.40 after the country's largest lender, on Saturday, 14 June 2008, decided not to raise its prime-lending rate. The decision was taken at a meeting of the assets-liability committee (Alco) of State Bank of India (SBI) on Saturday, 14 June 2008. The Alco met to deal with the issue of interest rates in the wake of the Reserve Bank of India's (RBI) move to raise repo rates, or the rate at which it lends to banks, by 25 basis points to 8%, on 11 June 2008, to contain inflation.

India’s largest aluminium manufacturer by sales Hindalco Industries fell 2.31% at Rs 171.35 after the company said on Friday, 13 June 2008, it may consider a comprehensive plan including an equity rights issuance to finance the loan taken to acquire leading aluminium-rolling company Novelis

India’s second largest telecom services provider by sales Reliance Communication fell 1.52% at Rs 535.10 after Reliance Industries, India’s largest private sector firm by market capitalisation and oil refiner, claimed first right of refusal to buy a controlling stake in it. Reliance Communications, controlled by Anil Ambani, is in exclusive talks with South Africa's MTN about a tie-up that could create a top-10 global telecoms firm. As part of a tie-up, Anil Ambani would likely swap his controlling stake in Reliance Communications to become the largest shareholder in MTN. Shares of Reliance Industries rose 0.73% at Rs 2284.85.

The markets closed at the lower end of the intraday range as bulls continued to remain on the fence where big-ticket buys were concerned. The market internals were positive, which is a mildly positive sign.

The 4,640-4,440 range advocated for Friday held as the Nifty spot traded within these parameters. The coming session is likely to witness a range of 4,560 on advances and 4,470 on declines.

The upmove will be deemed sustainable in the coming week only if the Nifty manages to trade consistently above the 4,560 level. The 4,535 level will be a bullish threshold, above which the bulls will continue to dominate the sentiments on Monday intraday.

The market internals indicate a lower turnover as the participation levels fell marginally due to the weekend factor. The number of trades decreased and the average ticket size was lower, indicating a weak selling bias. The capitalisation of the market was lower in line with a downtick session.

The outlook for the markets on Monday is that of cautious optimism as overseas cues will determine the immediate outlook. Avoid aggressive trades in either direction for now.

The market is likely to open higher tracking positive global cues. Sustained fall in crude oil prices from record high's, and declaration of robust advance tax numbers by India Inc later during the day may boost the sentiment.

However caution will previal in the coming day’s on fears that the Reserve Bank of India (RBI), as part of its efforts to contain rising inflation, would resort to more measures to make banks’ lending rates dearer.

Inflation, measured by wholesale price index (WPI), jumped to a 7-year high of 8.75% in the week to 31 May 2008, after rising 8.24% in the previous week. The negative impact of higher lending rates would rub off on the entire economy. Such concerns over slowdown in economic growth are expected to keep the market choppy in the near term.

Also high interest rates may delay expansion plans of corporates, which in turn may impact future earnings growth.

Most Asian markets were trading higher today, 16 June 2008, on speculation demand for the region's exports will be sustained as the yen weakened against the dollar and crude oil prices retreated.

US markets rallied on Friday, 13 June 2008, led by financial and technology stocks, as a tame core-inflation reading and lower crude prices boosted market. The Dow Jones industrial average jumped 166 points at 12,307. The Nasdaq Composite index surged 50 points up at 2,454.50. The S&P 500 500 index advanced 20.16 points to 1360.03.

Earnings downgrades by brokerages amid rising input and interest costs for India Inc and drying up of global liquidity due to credit crisis remain major concern for the Indian stock market. A further hike in rates would impact bottomline of Indian companies.

On the positive side, the Indian Meteorological Department (IMD)’s second monsoon forecast for the crucial annual south-west monsoon (June-September) due this month which may indicate spatial rainfall distribution in the main sowing month of July 2008, will be keenly watched by market men. The IMD has forecast the 2008 monsoon rains would be near-normal and 99% of the average between 1941 and 1990.

Market men will closely watch corporate advance tax payments for the first installment, which will a give a cue on expected Q1 June 2008 numbers from top Indian corporates. The income tax law requires a company to 15% the estimated tax liability for the year as advance tax in the first installment. The advance tax payment by the corporate sector will give a cue on Q1 June 2008 results.

Back home, the market slipped on Friday, 13 June 2008, as data showed a surge in inflation to a seven-year high and weak European markets. The 30-share BSE Sensex lost 60.58 points or 0.4% at 15,189.62 and the broader based S&P CNX Nifty was down 22.25 points or 0.49% at 4,517.10, on that day.

The BSE Sensex shed 382.56 points or 2.45% to 15,189.62 and the S&P CNX Nifty fell 110.70 points or 2.39% to 4,517.10 in the week ended 13 June 2008.

The Sensex is now down 6,017.15 points or 28.37% from its all-time high of 21,206.77 hit on 10 January 2008.

Foreign institutional investors (FIIs) were net buyers of Rs 625.28 crore in the futures & options segment on Friday, 13 June 2008. They were net buyers of index futures to the tune of Rs 167.32 crore and bought index options worth Rs 173.58 crore. They were net buyers of stock futures to the tune of Rs 224.58 crore and bought stock options worth Rs 59.80 crore.

Crude oil for July delivery fell as much as 86 cents to $134 a barrel in after-hours electronic trading on the New York Mercantile Exchange today, 16 June 2008 on speculation Saudi Arabia will increase production, reducing risks to global growth from near-record energy prices.

The Indian Market is expected to open on firm note on the back of strong global cues as the US market closed in green and Asian markets are trading with positive attitude. On Friday, the Indian market closed with losses after giving up its opening gains. The domestic market opened with positive note but was not able to maintain the balance and slipped soon after the start. It was hovering in negative territory through out the trading session due to the investors’ cautious behavior and ended in red on the back of rise in inflation. Inflation soars to 8.75% for the week ended 31st May 2008 which is highest in the seven years, as against 8.24% in the previous week. From the sectoral front, Metal, Reality, Oil & Gas and Powers stocks witnessed most of the profit booking while stocks of Pharma, Consumer Durables and Banking held gains of market. The BSE Sensex closed lower by 60.58 points at 15,189.62 and NSE Nifty ended down by 22.25 points at 4,517.10. We expect that market may gain some ground during the trading.

On Friday, the US market closed in positive territory due to technology and financial stocks, and lower crude prices helped the market end the week on a high note. Oil price falls to $135 a barrel. The Dow Jones Industrial Average (DJIA) closed higher by 165.77 points at 12,307.35 along with NASDAQ up by 50.15 points to close at 2,454.50 and S&P 500 rose 20.16 points to close at 1,360.03.

Indian ADRS ended positive. In technology sector, Wipro went up by (2.11%) along with Satyam by (2.02%), Infosys by (1.92%) and Patni Computers by (1.27%). In banking sector, ICICI bank and HDFC bank increased by (3.88%) and (0.63%) respectively. In telecommunication sector, MTNL and Tata Communication advanced by (3.23%) and (0.86%). Sterlite industries inclined by (1.50%).

Today the major stock markets in Asia are trading in green on Wall Street rally. Hang Seng index is trading higher by 374.00 points at 22,966.30 along with Japan’s Nikkei trading up by 205.89 points at 14,179.62 and Taiwan Weighted trading at 8,215.54 advanced by 109.95 points.

The FIIs Friday stood as net seller in equity. The gross equity purchased was Rs3,169.50 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs4,311.20 Crore and gross debt sold stood at Rs0.00 Crore. Therefore, the net investment of equity reported was (Rs1,141.70) Crore and net debt was Rs0.00 Crore.

Crude oil futures for the month of July delivery closed lower by $1.88 at $134.86 per barrel on New York Mercantile Exchange. Saudi Arabia, which is the world''s biggest oil exporter, is planning to raise its output by the next month by about a half million barrels a day. At present it is pumping 9.45 million barrels a day, with an improvement of about 0.3 million barrels from last month.

Today, Nifty has support at 4,449 and resistance at 4,613 and BSE Sensex has support at 14,979 and resistance at 15,514.

The central Air Conditioner major arranged an analyst meet to deliberate on the recently concluded financial performance of the company and put some light on the growth aspects of the different business segments of the company.

Highlights

The carry forward order book position of the different segments of the company as on 31st Mar07 is as follows:

Segment

Mar06

Mar07

Growth

Central Airconditioning

495

633

28%

Cooling Products

21

48

128%

Professional Electronics

49

74

51%

TOTAL

565

755

34%

Achievements in FY07

Consolidation of leadership in central and packaged airconditioning segment.

Over 150 Blue Star screw chillers installed and commissioned.

Dominated the telecom shelter airconditioning business with over 50% market share.

Volumes of split airconditioners grew 75%.

Tie-up with ISA, Italy for supermarket refrigeration equipment.

Several new customer accounts in the cold chain business.

Central AC Segment

This segment is the core segment of the company and continues to enjoy 30% market share in this business with predominant focus on the domestic market. This business encompasses design, manufacturing, installation, commissioning and maintenance of large central airconditioning plants. The Central AC segment also comprises of Wide range of chillers, air handling units and fan coil units, Comprehensive range of packaged airconditioning systems, etc. With energy efficiency as the technology platform, Blue Star is a pioneer in products, which save power.

The Company derives 40% of central air-conditioning revenues from National/Major Account customers which have significant growth potential. Blue Star expects to garner a major portion of the HVAC requirement from these customers.

During the quarter, the company clocked a 38% rise in its central AC turnover to Rs 387.03 crore.

Cooling Products

This includes the business of Room Air Conditioners and refrigerator products. During the quarter, revenues from this business grew by a strong 36% yoy to Rs 122.02 crore and during the year showed a rise of 37% to Rs 372.78 crore. The realizations in the room ACs have increased mainly due to fast increase in volume of the split Acs as well as refrigeration products. Going forward, the company sees better growth opportunities in this business segment due to the evolving cold chain concept in the country. Also, this segment has witnessed highest rate of growth in order book position for FY07 at 128%, signalling strong growth ahead.

Professional Electronics and Industrial Equipments

The company mainly provides value added reselling through this business by having good relation with renowned equipment manufacturers of the world. This business encompasses value added services in many industrial segments, which are distinct in their own respect. Although the growth in this service led business is good but the company faces tremendous shortage of quality engineers for this business. Nevertheless as a matter of strategy the company has forayed into several new high growth niche segments with additional product lines. Despite the constraint of the availability of quality manpower the company foresees a promising outlook for this business.

Exports

Blue Star has been exporting water coolers for over five decades. The Window and split ACs for high ambient temperature conditions have been well received in the Middle East and Iraq. The Company has been successfully exporting customised ducted systems and heat pumps for the Middle East and Europe. Also, Central air-conditioning products such as AHUs and FCUs are exported. The Company recently opened office in Doha for project and product requirements from the region. The Companys export revenues have registered a robust growth of 32% to Rs 89.99 crore for the year ended Mar07.

Major growth drivers

Construction boom

The Construction boom driven by IT/ITES, Retail and Infrastructure projects and the major growth plans announced by several players in these segments will translate into significant airconditioning and even refrigeration opportunities. Also, the Special Economic Zones (SEZs) are expected to drive growth.

IT/ITES

IT/ITES services are expected to grow in excess of 25% per annum over the next 3 years. An estimated 1.4 million people will be added till FY10 and office space of over 100 million sq ft will be needed. This translates into airconditioning requirement of over Rs 1500 crores. Blue Star enjoys a preferred partner status with Infosys, HP, Satyam, Wipro, HCL, Cognizant, Microsoft who are major players driving growth in IT/ITES segments.

Retail, malls and multiplexes

Based on plans announced by major players, 150 million sq feet of space will be added in this segment, translating into an airconditioning requirement of over Rs 2250 crores. Blue Star enjoys strong relationships with Reliance, Pantaloon, Shoppers Stop, Bharati, DLF, RPG, PVR, Adlabs and Vishal Megamart which are the main players driving growth.

Opportunities from telecom segment

Blue Stars telecom business for airconditioning cell sites grew 185% in FY07. The Company enjoys a dominant 50% market share in this segment. The subscriber base is expected to double over the next 3 years to 500 million necessitating 150,000 additional cell sites, translating into an airconditioning opportunity of Rs 1000 crores.

Opportunities from industrial segment

The Eleventh Five year plan includes addition of 48,000 MW of thermal power. Blue Star has already executed major power plant projects for NTPC, NPCIL and Jindal. The Company expects significant power plant project orders in the medium term. The pharma segment is another fast-growing segment which presents immense opportunites for the industry. Blue Star has strong credentials and expertise in the pharma segment as well.

Contracting opportunities

The construction boom will fuel growth in HVAC contracting business. Currently, 15% of mega projects involve integrated mechanical, electrical and plumbing contracting. Blue Star has developed capabilities in this area as well.

Outlook

The macro economic trends are favourable for Blue Star and is in a strong position to leverage the opportunities available. With all three lines of business performing well, the Company is poised to outperform the market growth.

Greenply Industries is Indias largest interior infrastructure company, which is engaged in manufacturing of plywood, particleboard, laminates and decorative veneer. The company arranged an analyst meet on 13 June 2007 to discuss the financial performance for the year ended March 2007 and the future prospects of the company.

Financial Highlights:

For quarter ended March 2007 the topline of the company increased by 67% to Rs 121.45 crore compared to corresponding previous period. The OPM improved by 290 bps to 10.9% due to strengthening of Rupee against Dollar. The companys bottomline increased by 78% to Rs 6.71 crore in the quarter ended March 2007.

For year ended March 2007 the topline of the company increased by 54% to Rs 429.23 crore compared to previous year. The OPM improved marginally by 20 bps to 10.8%. The companys bottomline increased by 60% to Rs 22.52 crore in the year ended March 2007 compared to previous year.

Other Highlights:

The company expects a cumulative annual growth rate of 35% in its topline for next two to three years with effective tax rate in the range of 18-20%.

The total debt of the company as on 31st March 2007 stood at Rs 146 crore.

The company implemented SAP in FY 2007 at a cost of Rs 3 crore.

The companys realizations for laminates increased by 11% to Rs 406 per sheet for year ended March 2007 compared to corresponding previous year and for plywood it increased by 20% to Rs 160 per sheet.

The company increased its dealer/ distributor/Sub dealer/ Retailers network to 7100 during FY 2007 from 3700 in FY 06.

The company has proposed registration of the Uttarakhand facility with the United Nations Framework Convention on Climate Change, raising a lucrative carbon credit trading opportunity.

The company has a largest market share of 25% in plywood and 15% in laminates in the organized market.

The companys expenditure on advertising and promotion increased by 43% to Rs 14.94 crore in FY07 compared to Rs 10.45 crore in FY06.

The capacity utilization for plywood division stood at 77% whereas for laminate division it stood at 115%. The company plans to enhance production from its plywood units and achieve capacity utilization in excess of 90%.

The working capital during FY 07 came down to 43 days from 72 days in FY 06.

Exports formed 8.32% of the total revenue in FY 07. The company is setting up a Singapore office to cater to the growing ASEAN interior infrastructure market.

Steam is no stronger now than it was a hundred years ago but it is put to better use.

Bulls may lack the steam but after yet another tumultuous week, they would fell better seeing some green ticks across most global markets. Sentiment could also shore up from the fact that FIIs were not big sellers in the cash segment on Friday and were in fact net buyers on the F&O side. For the market to reverse the current bearish trend and sustain better levels for a long period of time, the overseas investors have to resume their shopping spree. That may take a while to happen as macroeconomic fundamentals have turned weak over the past few months and may remain so for the near term.

Things may start looking up post monsoon (which may well be good). Prices of key commodities (especially that of crude oil) have to soften to ease the cost pressure for companies as well as individuals. Inflation, which is at a 7-year high of 8.75%, could soon touch double-digits. This will continue to cause headache for the policy makers as well as for the markets till inflation peaks out. A good harvest will be a major boon for the Indian economy, as well as the Government and of course the markets.

For now though, one may have to deal with lots of volatility in a narrow band. The bias remains negative, though there is a chance of a short-covering led rally as the market appears to be oversold from higher levels. This, one must add may not last long, as the bulls still lack confidence following the recent carnage and weakening economic fundamentals (both local and global). Any advance should be used as an opportunity to shed excess baggage.

Lots of stock specific activity is expected. Watch out for RCOM in the wake of RIL's opposition to the MTN deal. Ranbaxy could also remain in the limelight due to talk of Pfizer announcing a counter bid. Sterlite may be under pressure as it is also facing a counter bid for Asarco. Steel and iron ore companies will attract attention after the Government announced changes in duties. Car makers may be hit due to the increase in excise duty on big cars, MUVs and SUVs. Vikas WSP could see action as it announces its results today.

FIIs were net sellers of Rs1.16bn (provisional) in the cash segment on Friday while the local institutions poured in Rs4.57bn. In the F&O segment, foreign funds were net buyers of Rs6.25bn.

On Thursday, FIIs were net sellers of Rs11.42bn in the cash segment. With this, they have pulled out over $5.4bn from the Indian market this year so far. Mutual Funds were net buyers of Rs2.28bn on the same day.

Asian stocks rose for a second day, led by automakers and technology companies, as the yen weakened against the dollar and crude oil prices retreated.

Toyota climbed to a one-week high in Tokyo. Samsung and LG rose in Seoul. Korean Air Lines jumped after South Korea allowed its two biggest carriers to increase fuel surcharges.

The MSCI Asia Pacific Index added 0.5% to 141.32 as of 9:33 a.m. in Tokyo, rebounding from its largest weekly drop in 10 months. More than two stocks advanced for each that retreated among the benchmark's 991 members.

Japan's Nikkei 225 Stock Average added 1.2% to 14,140.21, extending its June 13 gain of 0.6%. Indexes advanced in other Asian markets open for trading, except for Australia which was little changed.

US stocks rallied on Friday, with a stronger dollar and weaker oil prices giving investors a reason to snap up some recently beaten-down shares. The Dow Jones Industrial Average gained 1.4%, while the broader Standard & Poor's 500 index gained 1.5% and the Nasdaq Composite climbed 2.1%.

US shares rose modestly at the open but picked up pace later on, despite a report showing a big jump in consumer inflation. Investors took advantage of some lower stock prices, following a tough period on Wall Street.

Lehman Brothers shares jumped 13.7%, bouncing back after a tough week in which the investment bank announced a stunning $2.8bn quarterly loss and a management shakeup. Lehman recovered on reports that BlackRock bought its shares in a stock offering earlier this week.

A variety of other financial stocks jumped too.

Yahoo remained in focus on news that it has partnered with Google on an online advertising deal, in lieu of the Microsoft takeover. And Anheuser-Busch was in focus again on reports that it is in talks with Grupo Modelo to ward off InBev.

The Consumer Price Index (CPI) rose 0.6% in May after rising 0.2% in April, reflecting the spike in oil and gas prices, and bringing the annual rate to 4.2%. Economists had expected a rise of 0.5%.

The so-called core CPI, which strips out volatile food and energy prices, rose 0.2% in the month, as expected, after rising 0.1% in April.

The University of Michigan's June consumer sentiment survey fell to 56.7 from 59.8 in May, reflecting the increase in commodity prices and turmoil in the economy. Economists thought sentiment would fall to 59, on average.

The housing market was dealt another blow after a report showed a big jump in foreclosures in May. Approximately 73,000 families lost their homes to bank repossessions last month, a jump of 48% from the year-earlier period, according to RealtyTrac, an online marketer of foreclosed properties.

US light crude oil for July delivery fell $1.88 to settle at $134.86 a barrel on the New York Mercantile Exchange. Gas hits new record: The national average price for a gallon of regular unleaded gas rose to a record high of $4.066 from the previous day's record of $4.060, AAA reported.

In currency trading, the dollar gained versus the euro and the yen. COMEX gold for August delivery rose $1.10 to settle at $873.10 an ounce. In the bond market, Treasury prices slumped, raising the yield on the benchmark 10-year note to 4.26% from 4.21% late on Thursday.

There may be some relief for the global economy as far as the cost of energy is concerned. Saudi Arabia, the world's biggest oil producer, plans to hike its oil production by 200,000 barrels per day (bpd) next month.

Saudi Arabia's oil minister apparently told this to U.N. chief Ban Ki-moon over the weekend, according to international reports. The U.N. secretary-general met Saudi oil minister Ali al-Naimi in the port city of Jiddah during a one-day trip to the world's largest oil producer.

Al-Naimi is learnt to have told Ban that Saudi Arabia would increase oil production by 200,000 bpd from June to July. In May, the kingdom increased its production by 300,000 bpd. By July, production should be at 9.7mn bpd, Al-Naimi is believed to have told the U.N. chief.

The surge in commodity prices threatens to undercut economic expansion and increase inflationary pressures worldwide, the Group of Eight (G8) finance ministers said in a statement on Saturday.

High prices for oil and food "pose a serious challenge to stable growth worldwide, have serious implications for the most vulnerable, and may increase global inflationary pressure," the ministers said in a communiqué marking the conclusion of their two-day meeting in Osaka, Japan.

Market to turn sideways

A volatile trading session ended in negative terrain as bulls were unable to carry their momentum further. Key indices started off on flat a flat note, however lost ground after India’s Inflation figures accelerated at fastest pace in almost 7 years. Inflation based on the wholesale price index (WPI), rose to 8.75% in the week ended May 31 from 7.24% in the previous week, much higher than average forecast of 8.25-8.35%. Government also said that Inflation rate for the week through April 5 has been revised to 7.71% from a provisional figure of 7.14%.

Among the 30-scrips of Sensex, 21 stocks ended in red and only 9 stocks ended in positive terrain. Finally, the BSE benchmark Sensex slipped 60 points to close at 15,189 and the Nifty index slipped 22 points to close at 4,517.

Educomp ended on a flat note at Rs3450. Reports stated that the company would implement computer-aided learning in select schools in Andhra Pradesh. The scrip touched an intra-day high of Rs3510 and a low of Rs3405 and recorded volumes of over 25,000 shares on NSE.

Jet Airways gained by half a percent to Rs546. According to reports, the company pulled out of negotiations to buy a strategic stake in SpiceJet. The scrip touched an intra-day high of Rs565 and a low of Rs543 and recorded volumes of over 15,000 shares on NSE.

Sun Pharma edged lower by 0.4% to Rs1471. Reports stated that Sanofi-Aventis has sued Sun Pharma for infringement of a US patent for Uroxatral. The scrip touched an intra-day high of Rs1489 and a low of Rs1445 and recorded volumes of over 45,000 shares on NSE.

IOC gained by 2.3% at Rs372 after the company said that it plans to set-up mini liquefaction plants to source gas from the marginal fields, stated reports. The scrip touched an intra-day high of Rs385 and a low of Rs363 and recorded volumes of over 13,00,000 shares on NSE.

L&T marginally gained by 0.3% to Rs2710. According to reports, the company said that it would invest US$6bn in the power generation business over the next five years. There were also reports stating that the company has postponed listing of its infotech business to the second half of 2009-10. The scrip touched an intra-day high of Rs2744 and a low of Rs2688 and recorded volumes of over 3,00,000 shares on NSE.

Idea ended 0.5% higher to close at Rs108 after media reports stated that Telekom Malaysia would pick up additional 15% stake in Idea. Telekom Malaysia-Idea deal to be at over Rs150 per share. The scrip touched an intra-day high of Rs112 and a low of Rs104 and recorded volumes of over 50,00,000 shares on NSE.

GHCL surged by over 13% to Rs71 on back of huge volumes. The scrip touched an intra-day high of Rs72 and a low of Rs64 and recorded volumes of over 94,00,000 shares on NSE.

Container Corporation gained 1.5% to Rs754. The company announced that it posted a net profit of Rs7.522bn for the year ended March 31, 2008 as compared to Rs7.038bn for the year ended March 31, 2007. Total Income increased from Rs31.419bn for the year ended March 31, 2007 to Rs35.117bn for the year ended March 31, 2008. The scrip touched an intra-day high of Rs765 and a low of Rs733 and recorded volumes of over 2,000 shares on NSE.

Corporate News

Reliance Industries sends letter to MTN; says it has the first right of refusal to buy the controlling interest in Reliance Communications.(FE) JSW Steel plans to invest Rs800bn to add 20mn tonne capacity.(BL)Idea Cellular to buy Spice Comm. in a three stage deal in which minority shareholders of latter can swap their shares for Idea’s shares or sell them in an open offer.(BS) Goldman Sachs to pay Rs7bn for a minority stake in M&M.(TOI)Hindalco Industries considering various options including rights issue to repay a US$3bn bridge loan it took to finance the acquisition of Novelis Inc.(BL) Telekom Malaysia is understood to have picked up ~15% stake in Idea Cellular at a price of Rs158 a share.(DNA) Videocon to roll out its GSM services from Chennai on August 15th of current year.(ET) Vedanta Resources bid for US copper firm Asarco faces a roadblock.(Mint)Hinduja Group to finalise a strategic investor to offload 15% stake in the 1,040MW coal fired project at Vizag in Andhra Pradesh.(FE) Wipro Technologies pulls out of its JV with Motorola.(ET) SBI decides against raising interest rates for the time being.(BS)ONGC Videsh, Indian Oil and Oil India together expect to spend US$3bn if they get the right to develop the Farsi block in Iran.(BS)The New York Times Company in discussion to acquire a 5% equity stake in Sieger Solutions, a 100% subsidiary of Deccan Chronicle Holdings.(BL) Reliance Power emerges as the lowest bidder to build two power projects in the Allahabad district of Uttar Pradesh.(BS) 3i Infotech completes the acquisition of US based Regulus Group for US$100mn.(DNA)TPG Newbridge may invest US$150mn for a 49% stake in a company that will hold 100% equity capital of Shriram City Union Finance.(BL) Pipe manufacturer PSL secures Rs 1.2bn order from BPCL.(BL) Spice Comm. promoter B K Modi in negotiations to acquire 39% stake in Sony Entertainment Television.(BS) Reliance Retail will soon enter into a 51:49 JV with US-based Avery Dennison Corp.(ET) Philips Electronics India decides to buy back shares for Rs1.8bn at Rs260 per share.(DNA) Maharashtra government decides to allot 25 acres of land in Nagpur to Mahindra Lifespace Developers.(ET) Ultra mega power project in Tilaiya, Jharkhand to be awarded in November; eleven companies short listed for the project.(BS) MAN Infraprojects, subsidiary of MAN Industries, to invest Rs10bn in real estate (DNA). Indo Asian Fusegear forms JV with a Spanish firm to manufacture wiring devices for home automation.(Mint) Lehman Brothers to invest Rs7.5bn in Unitech’s 97 acre project in North Mumbai.(ET) JK Tyres to set up a greenfield site for passenger car tyres.(ET) Sarswat Cooperative Bank has made a fresh application to the RBI to acquire the ailing South Indian Cooperative Bank.(ET)

Economic News

Inflation rises to 8.75%, a seven year high on dearer primary goods for week ended May 31st.(BL) State governments are planning to cap sales tax on jet fuel at 12.5%.(ET) Government raises export duty on iron ore and long steel products; imposes fresh excise duty on large cars and SUVs.(BS)Cement output in May 2008 fell marginally to 14.89mt against 15.02mt in April according to Cement Manufacturers’ Association.(BL) Drug price regulator has introduced pro rata pricing for injectibles in addition to oral liquids, tablets and ointments.(ET)Due to slowdown in passenger traffic and high ATF costs, airline companies are canceling or cutting deliveries due this year or sub-leasing them to other carriers globally.(BS)Government withdraws 5-15% export cess imposed on variety of steel products including hot and cold rolled coils, steel pipes and tubes and galvanized sheets.(ET) DoT may impose eligibility conditions for 3G spectrum auction.(BL) Cable operators may be allowed to build an optical fibre infrastructure.(ET) Government approves 13 FDI proposals worth Rs 15bn including one by steel major ArcelorMittal for its operations in India.(FE) Mining ministry to buy a Rs4.5bn deep-sea research vessel for seaboard mapping.(ET) Government is contemplating ban on maize exports to reduce price in the domestic markets.(ET)Empowered group of state finance ministers likely to discuss today Center’s proposal to reduce sales tax on petrol, diesel, cooking gas and jet fuel.(ET)

We recommend a buy in Dabur India from a short-term perspective. It is evident from the charts that the stock has been consolidating sideways since mid January in a broad range between Rs 94 and Rs 110. The stock began its current up move form the key support level at Rs 94.

During this up move it crossed the 21-day moving average. The daily momentum indicator is rising in the neutral region towards the bullish zone and the weekly momentum indicator has taken support around 40 level and has started rising. The moving average convergence and divergence is also showing signs of bullishness and is likely to enter the positive territory.

We are bullish on the stock in the short-term. We expect the stock to move upwards until it hits our price target of Rs 110 in this period. Traders with short-term perspective can buy the stock while maintaining the stop-loss at Rs 94.

US Market ended the week on Friday, 13 June on a mixed note. The Dow Jones industrial Average and the S&P 500 managed to eke out gains for the week. Nasdaq was the only major index to register loss. It was another volatile week of trading. But financial sector remained burdened with concerns about Lehman Brothers' financial position. On the other hand, Fed's inflation-fighting comments made market more nervous during the middle of the week. The only positives were the pleasing economic data and a welcome pickup in M&A news.

The Dow Jones Industrial Average gained 97.5 points for the week to end at 12,307.6. Tech - heavy Nasdaq lost 20 points at 2,454.5. S&P 500 ended practically unchanged at 1,360.03. In percentage terms, Dow and Nasdaq gained and lost 0.8% respectively.

Although the week began on an inauspicious note, it certainly ended on an auspicious one as the indices rallied into the close Friday, finishing at or near the session's highs.

On Friday, 13 June, crude prices closed down $1.90 on the New York Mercantile Exchange, settling at $134.84 per barrel and finishing the week roughly 2.7% lower. The sustained drop in oil prices helped provide airline and transportation stocks a healthy lift. Indices rallied and Dow ended higher by almost 165 points.

Also, on the economic front, consumer prices increased 0.6% month-over-month and 4.2% year-over-year, according to the May Consumer Price Index (CPI) data. Market was forecasting a monthly increase of 0.5% and an annualized increase of 3.9%. Core CPI data, which excludes food and energy, indicated prices increased 0.2% month-over-month and 2.3% year-over-year, which was in-line with the consensus. Nasdaq too ended higher by 50 points on that day.

Earlier during the week, in a speech late Monday, 9 June, Bernanke emphasized the central bank's determination to hold down inflation expectations. The Fed has hinted that it is most likely done cutting rates, and its next move is likely an increase in rates. Market viewed as a signal the Fed will move to tighten monetary policy later this year.

In the financial sector, Lehman Brothers weighed on the financial sector today after a second quarter earnings preannouncement from the company topped headlines. The struggling Wall Street firm reported that it expects a massive $2.8 billion second quarter loss and plans to raise $6.0 billion in new capital in common and preferred stock offerings. The stock slid by 20% during the week.

In economic news during the week, the Commerce Department reported that U.S. trade deficit widened to $60.9 billion in April on higher prices for crude oil and other commodities. Imports rose 4.5% to $216.4 billion, while exports increased 3.3% to $155.5 billion. Excluding the impact of inflation, the trade deficit slipped by 0.1% to the lowest level in nearly five years.

Also, retail sales increased May by 1.2%, excluding autos. The results were way ahead of the 0.7% increase that market had expected. April sales, less autos, were revised upward to an increase of 1.0%. The best part of the report was that, paired with the May same-store sales seen last week, the retail sales report for May, and the upward revision to April, the same will bode well for upward revisions to second quarter real GDP forecasts.

In other economic news, initial jobless claims for the week ending 7 June totaled 384,000, which is more than the 370,000 claims that were expected.

Among interesting corporate news, Yahoo! announced that it failed to reach an agreement with Microsoft but it has, instead, decided to team up with Google to increase its competitiveness in Internet search and display markets.

In the M&A arena, Belgian brewer InBev made an unsolicited $46 billion offer for Anheuser-Busch. The offer to BUD shareholders was 11% premium to last closing price.

Executive Summary

For the week, indices ended mixed. In percentage terms, Dow and Nasdaq gained and lost 0.8% respectively. S&P 500 ended practically unchanged. Although the week began on an inauspicious note, it certainly ended on an auspicious one as the indices rallied into the close Friday, finishing at or near the session's highs.

The week was mainly dominated by the crude oil and economic reports. Financial sector remained burdened due to news on the Lehman Brothers front. Crude prices closed down $1.90 on the New York Mercantile Exchange, settling at $134.84 per barrel and finishing the week roughly 2.7% lower. The sustained drop in oil prices helped provide airline and transportation stocks a healthy lift.

For the year, Dow, Nasdaq and S&P 500 are down by 7.2%, 7.5% and 7.4% respectively.

Gold prices end moderately higher but silver ends lower on the last day of the week

Precious metals ended moderately higher on Friday, 13 June, 2008. But its registered steep fall for the week that ended on that day. The dollar strengthening against its rivals was the main reason as to why bullion metals once again slipped on Friday. Crude prices too were trading lower during. Since the start of this week, the dollar had strengthened and also following on and off comments from Federal Reserve Chairman, Ben Bernanke, precious metals had lost ground. The same have reduced the appeal of the precious metals as an inflation hedge. Silver prices lost on Friday.

Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies. On the other hand, a lower dollar pushes up precious metal prices as their demand lessens as it becomes cheaper for traders holding other currencies.

Comex Gold for August delivery rose $1.1 (0.12%) to close at $873.1 ounce on the New York Mercantile Exchange. For the week, gold prices ended lower by $25.9 (2.9%). Last month, in May, it ended with a gain of higher by $22.5 (2.5%). On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped since then.

This year, gold prices have gained 4.5% till date against a 4.6% drop for the dollar against the euro. Before May, for April, prices closed lower by 6.3%. For first quarter prices gained 10.7%. In January, prices gained 11%, the highest monthly gain since April 2006. For February, it gained 6%. But in March, prices succumbed and fell by 5.5%.

On Friday, Comex silver futures for July delivery fell rose 8cents (0.5%) to $16.56 an ounce. Silver has gained 10.6% in 2008 till date. It finished 87 cents (5%) lower as against last week.

Silver prices ended the month of May 2008 with a gain of 2.7%. For April, it closed lower by 5.5%. Silver had gained 16% in Q1. In January this year itself, prices climbed 14%. In February, it gained another 15%. For March, it ended lower by 13%. The metal had climbed 16% in FY 2007. The metal also has gained for seven straight years.

At the currency markets on Friday, the dollar gained after data showed the U.S. consumer price index climbed 0.6% in May, the fastest pace in six months. The dollar index which tracks the currency against six trading partners, hit 74.14, up from 73.98 late Thursday.

Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies.

Since last September, Fed has axed interest rates seven times and brought it down to 2%. On the other hand, the ECB has kept rates unchanged at 4% since June, 2007.

In the crude market, crude futures for July delivery were closed down $1.74 to stand at $135.00 a barrel on friday.

Gold had witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. In 2006, silver had jumped 46% while gold gained 23%.

A host of factors pushed down all time crude prices lower on Friday, 13 June, 2008. Chance of an increase in output at Saudi Arabia as spoken earlier by some OPEC minister and stronger dollar were the major reasons. Coupled with these were lower forecast for oil demand growth. Earlier, during the week, EIA’s weekly inventory report by the Energy Department had taken crude prices higher by more than $5 at one shot to an all time new high crude price.

Crude-oil futures for light sweet crude for July delivery today closed at $134.86/barrel (lower by $1.88/barrel or 1.4%) on the New York Mercantile Exchange. Earlier it fell to $133.69/barrel. A key focus in Friday’s oil movement was also the dollar.

For the week, crude prices closed lower by 2.7%. For the year, crude is up by 38.6% till date. Prices are 102% higher on a yearly basis.

Organization of the Petroleum Exporting Countries (OPEC) reported on Friday that demand for crude from the OPEC Countries in 2007 averaged an estimated 32 million barrels per day, up 260,000 barrels per day from the previous year. But in 2008, demand for OPEC crude is expected to average 31.8 million barrels per day, down 130,000 barrels from 2007.

The cartel also aid it expects global oil demand to grow to 86.88 million barrels per day for 2008, up 1.28% from 2007's demand of 85.78 million, but down from the estimate of 86.95 million it forecasted in the previous month.

At the currency markets on Friday, the dollar gained after data showed the U.S. consumer price index climbed 0.6% in May, the fastest pace in six months. The dollar index which tracks the currency against six trading partners, hit 74.14, up from 73.98 late Thursday.

Earlier during the week, EIA reported that the nation's crude supplies dropped to 302.2 million barrels, down 4.6 million barrels, for the week ended 6 June. Thus, crude supplies have fallen a total of 23.6 million in four weeks. Refinery utilization was at 88.6% compared with 89.7% of capacity a week earlier.

Oil prices had shot higher by almost $11 a barrel on Friday, 06 June, 2008 scoring their biggest one-day gain in dollar terms as talk about a potential Israeli attack on Iran combined with a slide in the U.S. dollar. Prices had touched an all time high of $139/barrel but closed at $138.5. That was an all-time closing high.